Should a lot of simultaneous trades be opened when trading?

in LeoFinancelast month
When we start to trade cryptocurrencies, stocks, currencies, raw materials or whatever, it is normal for us to ask ourselves how many operations we should have open simultaneously. And the answer will depend on many factors:

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The answer is relative

In trading, opening a buy or sell operation means that we have an expectation with the price, it means that we project that the market price of the asset in question will do something specific, and based on this, we mark our position to take advantage of such movement or fluctuation.

Making such a projection with a medium level of security and confidence requires a great level of preparation, concentration and attention to detail on the part of the trader. At a fundamental level, it requires knowing what the markets of the assets that we operate can do based on the news related to the area or sector of the specific asset, at a technical level, it requires the management of a serie of indicators, candlestick patterns and temporalities different.

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All this attention to detail is not easy or within the reach of anyone, so making even a single trade requires a certain level of effort on the part of the trader.

When you are an experienced and well-prepared trader

But when you belong to that select group of experienced and well-prepared traders who know exactly what you are doing, then you are able to hold a certain number of trades simultaneously, since you are perfectly aware that you can control and attend all of them.

In that case, you are then someone who knows how to handle the risk involved in holding several operations (or many operations) at the same time, you know what to risk, when to risk and how much to risk, so the market will never surprise you, because even if you loss in an operation (or several), you know how to act, you have a strategy, and also, you have considered the probably loss in your operation. Then you are very capable to calculate exactly what to do so that unforeseen events will not excessively harm your global operation or excessively decrease your capital.

An experienced trader can perfectly open 10 simultaneous trades, without losing attention or detail in any of them; You can even open 15 trades at the same time (with different assets, of course) without losing control. However, traders who really know what they are doing try to limit their operations to 5 or 6 simultaneous trades as much as possible.

If you are just starting out in trading

Experienced traders advise those who are new to trading not to open many trades, to be more specific, they advise not to open more than two or three simultaneous trades to avoid losses and be able to trade properly.

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Even experienced traders sometimes refrain

It is worth mentioning that generally, experienced traders refrain from opening too many simultaneous trades (even knowing that they can handle them without problems), so as not to be stressed by the level of attention that such a task requires of them to control them properly.

Because although an experienced trader knows that he can perfectly handle dozens of trades simultaneously, he prefers to close trades before opening others in order to keep his mind clear and focused on the present moment as much as possible and to be more effective in every aspect.

It is something comparable to when a chess player is playing simultaneous games against several opponents. If he concentrates his mind on a single game, his level of attention to detail will be exponentially higher than if he concentrates on playing a lot of games at the same time. Well that is the best comparison and explanation that could be given in this regard.

The key is to know yourself

Knowing whether or not you are capable of handling several operations simultaneously and if it is worth doing at one point or another, comes from experience.

For this you must know perfectly the level of preparation you have as a trader, the type of trader you are, the capital you are willing to risk, and know how to manage your own emotions respectively.

If you know yourself well and know the market of the asset you are trading, and also, if you are wise and prudent when trading, then you yourself will discover or decide for yourself the convenience or not of doing several operations at the same time.

If you agree or disagree with what is expressed in this article, please share it in the comments.

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